The regulations and challenges in the pipeline means a major shift in strategy and approach for the refiners through a wider product slate – increased conversion and enhanced flexibility being the key elements. While the refinery complexity is rising and as a result there are implications in the capital cost, the attraction is the advantage in terms of flexibility and financial performance. How to improve the overall conversion of the residues of all crudes into the most valuable distillates is the only simple challenge in refining, particularly for the refineries processing heavier crudes.
By integrating deep conversion processes into their asset configuration, refiners are adopting the most suitable strategies to minimise high sulphur fuel oil production as the 1 January 2020 deadline of IMO Marpol VI regulation approaches fast. To help choose between various process options, there are a long list of criteria available. Operational strategy of the plant as well the business environment are important elements to be considered, on top of technical features. Refiners in the Middle East are implementing different technologies and strategies to meet these challenges head on as they are well aware of the challenges ahead.
When we consider the petrochemical industry, it is evident that the sector is also traversing a long journey of challenges. The industry is adapting to changes in global supply and demand patterns, volatile feedstock prices, and stringent environmental regulations. A huge amount of petrochemical capacity has been added in the recent years in the Middle East, China, and the US. This has further harmed the fragile global supply-demand balance. Thanks to cheap ethane, the Middle East enjoys the world’s lowest ethylene production cost. Growing at an average of 10%, the region has witnessed remarkable capacity additions in the last ten years. In the future, the expansion rate is predicted to be more moderate.
To conclude, the refiners and petrochemicals manufacturers need to win competitive advantage to sustain, or increase their market share, depending on their location, feedstock costs and operational efficiency. Their top priorities should be enhancing organisational efficiency to the maximum level and promoting operational performance.